- A second FDIC regulation on prudential standards is expected early next year.
- The FDIC will oversee bank subsidiaries that issue payment stablecoins.
- Guidance regarding tokenized deposits is currently being developed.
US regulators are swiftly establishing a new framework for stablecoin supervision, as federal agencies prepare detailed regulations influenced by the GENIUS Act.
The Federal Deposit Insurance Corporation (FDIC) plans to release an application framework for payment stablecoin issuers this month, marking a significant step in executing the legislation signed by President Donald Trump earlier this year.
In addition to the FDIC, the Federal Reserve and Treasury Department are also defining their regulatory roles, indicating a united effort to integrate stablecoins into a more structured oversight system.
FDIC establishes a licensing framework for stablecoin issuers
The FDIC has confirmed through written testimony set to be delivered to the House Financial Services Committee on December 2 that it is preparing to issue a proposed rule detailing how payment stablecoin issuers can apply for approval.
This initiative started earlier this year in its role under the GENIUS Act, with the initial formal proposal expected by month-end.
A subsequent proposal addressing prudential requirements for FDIC-supervised issuers is anticipated early next year.
Upon publication of the application framework, the agency will seek public input before finalizing the rule, a process typically spanning several months.
GENIUS Act enhances oversight of bank-affiliated stablecoins
The GENIUS Act introduces a nationwide approach mandating federal and state regulators to synchronize their oversight of stablecoin issuers.
According to the law, the FDIC will regulate and license subsidiaries of insured depository institutions that issue payment stablecoins.
The FDIC will also establish capital requirements, liquidity standards, and diversification rules for reserves.
Much of this oversight will be implemented over the next year, as numerous regulations are required to fulfill the stipulations set forth in the legislation.
The FDIC is also considering recommendations put forth in July by the President’s Working Group on Digital Asset Markets, which urged regulators to clarify allowable digital asset activities for banks, including tokenization of assets and liabilities.
Tokenized deposits under regulatory examination
Along with its stablecoin duties, the FDIC is working on new guidance to clarify how tokenized deposits will be regarded under federal regulation.
This topic has gained traction as banks investigate digital alternatives for traditional deposit products.
The forthcoming guidance is expected to assist institutions in understanding which activities fall within regulatory oversight and how these will be supervised.
Federal Reserve formulates its own stablecoin standards
The Federal Reserve will participate in Tuesday’s House hearing, with Vice Chair for Supervision Michelle Bowman outlining the central bank’s efforts regarding stablecoin regulations.
The Federal Reserve is collaborating with other banking regulators to develop the capital, liquidity, and diversification standards stipulated by the GENIUS Act.
This initiative aims to provide clarity for banks engaged in digital asset activities and to offer regulatory input on emerging use cases.
The joint endeavor seeks to ensure that the banking system can facilitate the growth of digital assets while maintaining stability and compliance.
Other agencies are also progressing with their responsibilities under the GENIUS Act.
The Treasury Department has concluded its public consultations, which wrapped up in November, and is in the process of developing its own regulations.
These actions will occur concurrently with the processes of the FDIC and the Federal Reserve, contributing to the comprehensive national framework being established to govern stablecoins throughout the US.
